Investment Capabilities

Invest with Sector ETFs

Sector ETFs are a powerful tool for investors, offering a straightforward way to incorporate simple or sophisticated sector strategies with precision and transparency. And with $633B in AUM,1 it’s clear that equity sector ETFs are more than just a trend.

Powerful Portfolio Construction Tools

Sectors divide the economy into groups of companies that operate similar businesses or provide related products and services. Creating these segments enables in-depth analysis of market dynamics to see which parts of the economy are flourishing — or lagging — in order to find pockets of potential out performance.

Sector investments provide targeted exposure to these economic segments, giving you a wide variety of options to enhance the core of your equity portfolio and adapt to changing market cycles with agility and precision.


Customize Portfolios with Sector Strategies


Using sector-based investment strategies can help you align and adjust your portfolios based on macroeconomic or thematic trends, like clean energy and declining interest rates, changing stock fundamentals, or shifts in technical indicators, like momentum.

Sector strategies can help you:

  • Pursue alpha: capitalize on a wide dispersion of returns by overweighting winners and underweighting losers
  • Position for business cycles: align your portfolio with shifts in business cycles by either increasing or reducing allocations to specific sectors based on the current economic phase
  • Capture secular or cyclical industry trends: sectors are closely aligned with specific economic variables (oil, inflation, rates), and can help investors capture secular or cyclical industry trends
  • Harness diversification benefits: seek targeted exposure to a theme or trend without taking on stock-specific risks

Read more about each of these investment cases in Four Reasons to Implement a Sector Strategy.


How to Construct a Sector Portfolio


When you’re ready to implement a sector strategy, you can consider carving out a portion of your US equity exposure for sectors. Then, choose your sectors based on these types of analysis:


Top-Down


Thematic


Bottom-Up


Technical


Partner with a Leader in Sector Investing


State Street Global Advisors launched the world’s first suite of sector ETFs in 1998, and continues to expand on that heritage to help investors precisely meet their desired sector exposures.